High earner later in your career? You’re a HERO - here’s what it means for your pension

The financial world loves an acronym. SIPP, GIA, ISA, CGT, IHT, the list is endless.

One you may have heard is ‘HENRY’ - that’s ‘high earner, not rich yet’.

These are younger people early in their careers who earn well but haven’t yet accumulated much wealth. Based on their early career trajectory, they probably will.

There’s often a lot of talk about how HENRYs should pay into their pensions. Contributing now could help them make the most of tax relief and potential investment growth to build wealth for their future.

But this is also true for high earning older workers.

Here’s why. 

High earning, rich and old? You might be a HERO

These individuals have been coined by Personal Finance Expert, Sarah Coles, as HEROs: ‘high earners, rich, and old’.

A HERO may have always been a high earner, perhaps having been a HENRY earlier in their career. 

Or they might’ve become one later down the line after years of hard work. Perhaps they started on a lower salary and worked their way up to reach their peak earnings later on.

If you’re a HERO, you’ve probably built up a fair amount of wealth. That could be in savings or an investment portfolio. You’ll probably also own your home, plus potentially some investment properties. 

Unless your earnings were extremely high (more on this in a moment), it’s likely that you’ll have a pension, too. 

That pension could even be the most valuable part of your wealth. It’ll have been invested since near the start of your career and had the opportunity to grow over time.

4 pension questions for HEROs to ask

Much of the hard work of paying into your pension might’ve happened at the start of your career. 

Now, as you approach the end of your working life, you could be nearing or already at the age when you’d access your pot. For most people, that’s 55, rising to 57 by 2028.

However, there’s still plenty to think about. That might be the value of continuing to pay into your pension in later life, or what to think about ahead of drawing your pot.

Here are four questions to ask yourself if you’re a HERO.

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1. Could you boost your pension ahead of retirement?

While growth’s not guaranteed, it’s generally true that the longer you invest, the more time your money has to grow. That’s because, although there are periods of volatility in between, markets historically rise over time. 

Plus, returns like interest and dividends compound and start earning their own returns. That snowballs and can help boost your pot over the years.

That’s why you’ll hopefully have contributed to your pot since the very start of your career.

Even so, boosting your contributions later on can still be sensible.

Firstly, you may be able to make the most of tax relief. That’s where the government tops up your contribution with the tax you’ve paid on those earnings. 

As a high earner, you’re likely a higher or additional rate taxpayer. In that case, a £1,000 contribution would technically only cost you £600 or £550 respectively. 

You can pay into your pension up to the annual allowance of £60,000 (2026/27). This is the gross amount that can be saved each tax year without incurring tax charges. That includes contributions from your employer.

But only personal contributions or those made by a third party (such as a family member) benefit from tax relief. You can receive tax relief on personal and third party contributions up to 100% of your salary, capped at £60,000 per year (2026/27).

Bear in mind that especially high earners may be more limited in how much they can pay into their pensions tax-efficiently - more on this below.

You might reach your peak earnings potential later on, too. As a result, even an extra 1% of your income going into your pot now could be more powerful.

2. Could your pension help you reduce your tax bill?

HEROs may have to consider the £100,000 tax trap. 

This is where earnings between £100,000 and £125,140 are effectively taxed at 60%. That’s because you lose your tax-free Personal Allowance for Income Tax.

This is a cliff-edge threshold that kicks in as soon as you earn even £1 over it.

Fortunately, your pension could help. Your contributions aren’t included when working out your earnings for this threshold.

So, paying into your pot could reduce how much you’re affected by the 60% trap. If your earnings are in that £100,000 to £125,140 window, you might even move back below the threshold.

That would fully restore your Personal Allowance. 

Plus, if you have children at home, crossing this threshold can see you lose access to free childcare hours and tax-free childcare. You'd get these back by getting back below the £100,000 mark.

3. Is your pension annual allowance reduced?

Before you pay more into your pension, it’s worth checking whether you’re affected by the tapered annual allowance.

For some particularly high earners, this sees your annual allowance reduced from the standard level (£60,000 in 2026/27).

That happens if your earnings are above both of two key thresholds.

• Threshold income (£200,000 in 2026/27) - your earnings without pension contributions. 
• Adjusted income (£260,000 in 2026/27) - your earnings plus pension contributions.

If your earnings are over this threshold, your annual allowance is reduced by £1 for every £2 you’re over the adjusted income threshold. That’s down to a minimum of £10,000.

So, if your adjusted income were £360,000 or more, your annual allowance would taper down all the way to the £10,000 minimum (2026/27).

With this in mind, you can see why it’s important to check whether it’s tax-efficient to pay into your pension if your earnings are particularly high.

4. Do you need to access your pot yet?

You might’ve reached the age when you can access your pot (55, rising to 57 by 2028 for most people).

But while you can, it doesn’t mean you have to.

If you’re still working and have enough income from your career to fund your lifestyle, you could delay and leave your pot untouched until later. 

Doing so could help ensure that your pot’ll last the rest of your life. It might even allow it to keep growing, too.

That way, you can be confident that you’ll have the savings you need for the retirement you want.

Make the most of retirement with PensionBee

Whether you’re at your peak earnings now, or winding down towards later life, opening a PensionBee pension could help.

Combine and contribute easily online via the website or app. Then, when you’re ready to access your savings, take one-off payments or set up Automatic withdrawals (from 55, rising to 57 from 2028) and start hitting your retirement goals.

Find out who you could be with PensionBee.

Risk warning

Please note that tax rules change regularly, and the actual tax benefits you receive will depend on your individual circumstances. If you’re not sure, please seek professional advice.

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.